The announcement by the NBA came as Donald Sterling's attorneys filed suit in a Los Angeles federal court against the NBA and Commissioner Adam Silver asking for damages in excess of $1 billion.

The suit alleges that the league violated Sterling's constitutional rights by relying on information from an "illegal" recording that publicized racist remarks he made to a girlfriend. It also says that the league committed a breach of contract by fining Sterling $2.5 million for those remarks and that it violated antitrust laws by forcing a sale.

Shelly Sterling, who is a co-owner, negotiated the deal to sell to Ballmer late Thursday despite objections expressed through her estranged husband's attorneys.

She was able to do so because Donald Sterling was stripped of his ability to act as a co-trustee of the family's fortunes, including the Clippers, after two neurologists determined he was suffering from dementia earlier this month, according to a person close to the Sterling family.

The NBA said in a statement that the league, Shelly Sterling and the Sterling Family Trust had "resolved their dispute over the ownership of the Los Angeles Clippers."

"Under the agreement, the Clippers will be sold to Steve Ballmer, pending approval by the NBA Board of Governors, and the NBA will withdraw its pending charge to terminate the Sterlings' ownership of the team," it said.

The league said that Shelly Sterling and the Sterling Family Trust also "agreed not to sue the NBA and to indemnify the NBA against lawsuits from others, including Donald Sterling."

That means whatever monetary damages Donald Sterling may receive under the suit - filed on behalf of Sterling and the Sterling Family Trust - may go out one pocket and back in the other unless he is reinstated as a trustee and can nullify the agreement.

"Mr. Sterling's lawsuit is predictable, but entirely baseless," NBA general counsel Rick Buchanan said. "Among other infirmities, there was no 'forced sale' of his team by the NBA - which means his antitrust and conversion claims are completely invalid. Since it was his wife Shelly Sterling, and not the NBA, that has entered into an agreement to sell the Clippers, Mr. Sterling is complaining about a set of facts that doesn't even exist."